Starbucks is a coffee business founded in Seattle in 1971 that operates in the Americas, Europe, Middle East, Africa, China, and Asia-Pacific. The company has 277,000 employees, sales of $23.5 billion in 2018, and 27,339 stores worldwide in 2017.
What Makes Starbucks Different From The Marketing Mix Perception?
The marketing proposition that Starbucks has made in its expansion is global. This article analyzes this marketing strategy concerning four elements: product, price, promotion, and distribution channels.
Product approach
An easily recognizable product
If we do a product analysis, we will see how important the brand is for this brand. A Starbucks is pointing to the same symbol, the green siren, everywhere worldwide.
Personalization of the product
The ability to choose and personalize coffee is becoming an increasingly important feature for consumers. In addition to writing each customer’s name on plastic cups, they can choose from several coffee options. Thus, they are no longer limited to regular coffee but have created new presentations and flavors that aim to please customers and satisfy different tastes. Despite all this, Starbucks has given customers control over what they consume.
Quality of the product
Starbucks sells high-quality products and prices them higher than coffee shops. They used the high-price approach to target middle-class consumers and attracted consumers with low purchasing power (especially young people).[1]
An emotional connection with customers
They have created what they call the “third place.” If the first place is home, the second place is work, and the third place is where everyone goes home and works. To occupy the third place, they create a relaxing atmosphere that gives customers a unique experience.
In this way, the company creates a connection between the store and the feeling of drinking coffee in a famous place where the customer feels at home. Therefore, their product is not limited to coffee but goes beyond that and includes a comfortable environment where you can study, work, read, talk, etc. Therefore, the strategy is based on replacing coffee shops with places that attract customers with excellent service, the aroma of coffee, comfortable rooms and chairs, free Wi-Fi, and regular cleaning. In short, the perfect atmosphere.
Success
Drinking Starbucks coffee is associated with successful modern life. In many TV series and movies, the main actors and actresses drink coffee and often have something in common: young, attractive, and successful. So, when customers buy coffee from Starbucks, they buy more than just coffee. They are emulating the roles of the movies they are watching.
Price approach
Starbucks products are at a higher level of differentiation than other competitors because Starbucks uses a premium pricing strategy. This strategy exploits changing consumer behavior to sell expensive products based on the theory that higher prices mean higher prices. Through this high-cost strategy, the company maintains its high-end market image.
Advertising approach
Starbucks’ biggest advertising campaign is spread through its customers. Although the company runs campaigns when introducing new products or flavors, advertising spends only 1% of its revenue. This strategy is due to the fact that Starbucks does not need advertising, as movies, TV shows, and celebrities already do the advertising. It is common to see photos of celebrities holding a cup of Starbucks coffee in the tabloids.
Distribution channels approach
Starbucks offers most of its products through the company’s coffee shops. However, they are also sold through the Starbucks online store and app.[2] This means that the company keeps up with new technologies and market conditions.
Conclusion
In short, Starbucks differentiates itself primarily by selling an experience—the coffee-drinking experience—to middle-class urban customers.